CFPB Delays Mortgage Disclosure Implementation Date

Credit unions received an early holiday gift from the Consumer Financial Protection Bureau Friday, when the regulator announced it will extend the effective date for new mortgage disclosure regulations.

Although the CFPB did not specify a new effective date by which mortgage lenders must comply, it did say lenders will not be required to provide the disclosures until all proposed mortgage disclosure rules are finalized, which is expected sometime next year.

The Dodd-Frank Act required that the CFPB integrate certain disclosures from the Truth in Lending Act and the Real Estate Settlement Procedures Act.

Dodd-Frank also required additional new mortgage disclosure requirements, including disclosures on cancelation of escrow accounts, on a consumers’ liability for debt payment after foreclosure, and the creditor’s policy for accepting partial payment, which would have automatically taken effect Jan. 21, 2013 unless other action was taken.

“Considering these disclosures on the same timeline will ensure that consumers receive clear, concise, and consistent information,” said CFPB Director Richard Cordray in a release. “By seeking public comment and conducting consumer-testing for these disclosures together, we can avoid the duplication and inefficiency that existed in the past.”

Both CUNA and NAFCU had repeatedly asked the CFPB to delay and align the effective dates for the disclosures, both in meetings with the bureau and in comment letters. Both trades expressed their support for the announcement.

Carrie R. Hunt, NAFCU general counsel and vice president of regulatory affairs, said her organization “will continue to push the bureau to provide regulatory relief from regulatory changes designed to rein in the practices of bad actors.”

Hunt said, “The volume of change credit unions will face this year and next on the mortgage front is almost too large to quantify and we would ask the CFPB anew to take a hard look at not just implementation dates, but areas where regulation can be eliminated.”

CUNA President/CEO Bill Cheney said “This extra time will give CUNA, Leagues and credit unions more opportunities to urge the agency to minimize the impact of these proposed rules on credit unions.”